The South African mines of Samancor Manganese will remain closed until a review of the operation has been completed, majority shareholder South32 has announced.

Production was suspended on November 2 due to a fatality at the company's Mamatwan mine and mining is not likely to resume until January 2016, South32 said.

The miner, which was spun out of BHP Billiton last year, expects to meet its customer commitments by drawing down stocks, it added.

“While production will be significantly impacted in the 2016 financial year, rail and customer commitments will be met by drawing down inventory during this period,” it said.

Metal Bulletin reported last week from its 31st International Ferro-alloys Conference in Prague that widespread manganese ore production cuts were being rumoured amid sharp price declines.

Metal Bulletin's index price for 37% manganese ore, fob Port Elizabeth stands at $1.56 per dmtu, compared with $2.33 per dmtu in early June and $3.17 per dmtu at the start of 2015.

A South32 spokesman declined to comment when asked at the manganese panel discussion in Prague if he could provide clarity on the likelihood of production cuts.

South32 announced in the summer that its South African manganese operation, which includes the Metalloys manganese alloy production, had been put under review.

“A further update for the joint venture’s South African manganese mines and Metalloys smelter will be provided upon completion of the strategic review, the company said this week.

Samancor Manganese is the world’s largest producer of manganese, with operations in South Africa and Australia, where it operates the GEMCO manganese ore mine and the TEMCO manganese alloy smelter.

Janie Davies
Twitter: @janiedavies_mb